This is the record kept of all transactions that takes place in your business from day to day. It is a record of all sales, expenses and any other transactions that takes place.
It is possible to keep such records in a basic spreadsheet or in paper form. However, we strongly recommend using a purpose built bookkeeping package. This will allow you to enter your data easily, keep accurate and timely records, as well as being able to review how your business is doing.
We recommend using something like XERO. This is an online bookkeeping package that allows you to record all your income and expenses, as well as reconcile these accounting transactions to your bank account.
If this is set up correctly when you first start your new business, it will make your bookkeeping and accounting a lot easier and simpler going forward.
This is normally done by the business owner or manager, but it is possible to hire a bookkeeper to complete this for you, on a weekly or monthly basis.
The final accounts are produced using the bookkeeping records. They are prepared in a specific format to meet the rules and regulations required by Companies House and HMRC.
The accounts will include adjustments not seen in the bookkeeping records for things such as depreciation, accruals and prepayments.
This is normally done by an accountant, although on very basic companies, it is possible to do this yourself.
Remember, your accounts must be filed with Companies House to avoid fines and penalties. This must be done within 9 months of your accounting period ending.